Cosco: Daiwa raises TP to $1.01 from $0.75 but still retain UnderPerform rating. Believe that recent strong share-price performance (+33% YTD), has been based on sentiment rather than fundamentals. Add that co. is likely to continue to suffer from 'learning-curve' costs in its attempt to move into the rig-building space, and the stock still appears expensive.
Raise TP by 35%, driven primarily by adjusting up target PER from 9.2x to 16.1x, which is a 20% discount to its historical average. However, apply a 20% PER valuation discount due to execution concerns about Cosco’s rig-building business in 2012.
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